Bonds That Pay Very High Interest Rates and Typically Have

question 394

Multiple Choice

Bonds that pay very high interest rates and typically have a higher risk of default are known as

• A) zero-coupon bonds
• B) bearer bonds
• C) junk bonds
• D) volatile bonds

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Definitions:

Mexican Pesos

The currency of Mexico, abbreviated as MXN.

Foreign Exchange Gain

A profit arising from the increase in value of one currency against another in which a company holds assets or liabilities.

Non-Interest-Bearing Note

A financial instrument that does not accrue interest over its life, promising to pay the principal amount at maturity.

U.S. Dollar Equivalent

The value of a foreign currency expressed in terms of the amount of U.S. dollars it can be exchanged for.